If you’re planning on purchasing a home, you’re likely looking into the mortgage rates offered at different institutions to ensure you’re receiving the best deal available.
That said, HSBC boasts one of the lowest mortgage rates currently offered in Canada, which is very appealing to new homeowners looking to save money.
Of course, that begs the question: why are HSBC’s mortgage rates so low in comparison to other Canadian banks? We’ll answer this and other related questions below, so keep reading to find out more.
HSBC mortgage rates have been the lowest offered in Canada since 2020 when the company announced it would be offering a massive drop in rate percentage. In December 2020, HSBC stated their mortgage rates would now be offered below 1% for five-year variable closed-term mortgages.
These rates were lowered due to the financial downturn of the initial COVID-19 outbreak, which rippled throughout economies worldwide.
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This measure was put into place not only to draw in more customers to HSBC but also to ensure better that these customers would purchase additional financial products due to the decrease in mortgage prices.
HSBC currently offers a few different mortgage rates for new homeowners to choose from, in addition to their five-year variable closed-term mortgage rate, which currently sits at 0.70%. Let’s examine these further below, along with their varied term lengths:
2-year fixed closed mortgage:
3-year fixed closed mortgage:
5-year fixed closed mortgage:
7-year fixed closed mortgage:
5-year variable closed mortgage:
Listed below are the current variables for each percentage rate and term:
Posted fixed-rate open mortgages:
Posted fixed-rate closed mortgages:
Posted variable rate open mortgages:
Posted variable rate closed mortgages:
While there are quite a few benefits of having a mortgage through HSBC, there are also a few downsides you may wish to consider before deciding whether to finance your mortgage through this institution.
Of course, whether the pros outweigh the cons for you will largely depend on your own personal and financial needs. So, to get a better idea of how they measure up, let’s examine some examples below:
Security: A big draw-in for many HSBC customers is the level of security this company provides to account holders and homeowners.
HSBC’s reputation is renowned both in Canada and around the world, and it has access to virtually limitless resources that provide them with the best protocols available for secure financial transactions.
Competitive rates: Unlike most commercial Canadian banks, HSBC offers very low rates, as we’ve touched on above. Not only are these low rates available, but they are offered upfront and do not need to be negotiated down from a higher price.
Shorter hold on rates: Unlike other commercial banks, which generally offer 120-130 day holds for mortgage rates, HSBC only provides a 90-day hold on these figures.
Unfortunately, this reduces consumers’ time to shop around and compare rates from other institutions.
Customer service experiences: While HSBC offers great rates for their mortgages, their customer service is known for being sub-par compared to other banks.
For instance, there is a much longer wait time of 5-10 days to schedule a meeting at your local HSBC, which isn’t ideal for those considering mortgage offerings from other banks.
If you’d like to apply for an HSBC mortgage, you can do so online through the company’s website. First, you’ll have to request a quote for your estimated mortgage rate by filling out an online form.
This form will require you to provide your expected loan amount, along with your estimated credit score and payment timeline. As well, you’ll be asked to provide your contact information in order to be contacted by a mortgage consultant.
Once the mortgage consultant has contacted you, they will begin to walk you through the process of applying for a loan. Make sure to have your information regarding personal assets and income on hand, as they may ask you questions about these items.
If you’d prefer a more direct method, you can also fill out an application form on the HSBC website, over the phone, or in person.
When you apply for a mortgage at HSBC, make sure you have 30 days worth of pay stubs and two months of bank statements on hand, as the broker you’re working with will need to evaluate your financial standing.
When deciding which type of mortgage to take out on your new home, it’s important to understand what goes into determining mortgage rates.
When determining the funding cost for mortgage interest rates, lenders need to consider a few important factors, such as the current economic state both in Canada and worldwide.
To ensure a good mortgage rate, a strong global economy is important, as Canada often borrows money from other countries, meaning when global rates fluctuate, so do ours.
As well, lenders have to account for the Bank of Canada’s influence on interest rates. The rising cost of living has a great impact on the Canadian prime rate, which is the number that mortgage brokers use as a guideline when determining the interest rates for their loans.
You also have to take yourself into consideration when deciding on which mortgage and rate you’re willing to pay or are qualified for. Your credit history will make an impact on whether you’re considered a risky investment, and the higher the risk, the higher the resulting mortgage rate.
You need to consider the amount of time between your mortgage negotiations, as well. Most mortgages are re-negotiated every five years and can go as long as up to ten years, but the more often you re-negotiate, the more you risk paying a higher fee on the new rate.
HSBC began providing lower mortgage rates to accommodate the unprecedented economic downturn of the initial COVID-19 pandemic and has managed to maintain low rates since. At this time, their prime rate sits at 0.70% for closed-term 5-year mortgages.
If consumers want to apply for an HSBC mortgage, they can do so through the HSBC website, over the phone, or in person, and also request a mortgage rate quote.
However, those looking into mortgages from other banks should be aware that HSBC has a longer wait time for scheduling a meeting, which may interfere with the timelines you’ve been provided from the other banks you’re considering.
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